Kelly Choos 
Many Amtek lenders are now directing their anger at Sanjeev Guptachairman of a London-based metalworking company Liberty Housewhich, after placing a winning bid to acquire Amtek Auto, abruptly backed down at the last moment, frustrating the bankruptcy process.
This isn’t the first time Liberty House has stumbled after placing a winning bid. It’s been a pattern, say the lenders. He reneged twice – once after becoming the best bidder for ABG Shipyard and once in the case of Adhunik Metaliks Ltd in the same way.
Angry lenders have since sued Liberty House and want the firm stopped from bidding for troubled assets in India under the Insolvency and Bankruptcy Code (IBC).
“It’s been a colossal loss for the lenders,” said a senior banking executive who served on the creditors’ committee of two of the assets, on condition of anonymity. “We want Liberty House to be blacklisted. In the case of Adhunik Metaliks, we will take ownership ₹55 crores paid to us (by Liberty House). But we also want Liberty House to be penalized for the cost of the delay in resolution and for how much the asset has deteriorated since their resolution plans were approved.”
More than a year after being declared the successful bidder, Liberty House has not paid the ₹4,400 crore that he offered to acquire Amtek. Gupta also reneged on the amount of the resolution for Adhunik Metaliks, where he proposed ₹600 crore against a combined loan default of ₹5,000 crore by metal group. In the case of ABG Shipyard, Liberty House was the only bidder, offering ₹5,200 crores (with ₹400 crore in advance) against the ₹18,245 crores that the shipbuilder owed to banks. All three cases are now heading for liquidation. In March, Liberty House also withdrew its resolution plan for Amtek Ring Gears Ltd, a unit of Amtek Auto, long after it was declared the successful bidder. The insolvency court imposed a cost of ₹1 lakh on Liberty House for its flippant approach to the resolution process, but allowed it to withdraw its offer.
“It is still possible to revive Adhunik Metaliks,” the banker said. match Liberty House’s offer. The liquidation process in this case has been suspended for the time being. In the case of Amtek Auto, I don’t know if Deccan Value Investors (which originally made a competing bid of around ₹3,150 crore) is still interested. We intend to pursue criminal charges against Liberty House and Sanjeev Gupta.”
In May, the Insolvency and Bankruptcy Board of India, the bankruptcy regulator, accused Liberty House and its senior executives of willfully breaching the terms of Amtek Auto’s resolution plan.
A year ago when mint interviewed Gupta, the London-based entrepreneur said he wanted to commit to investing up to $10 billion in India. Liberty House is part of the Gupta Family Group Alliance, a tightly knit but loosely related collection of the family’s various business interests in the UK, EU and Australia. In July, Liberty Steel completed the €740 million acquisition from ArcelorMittal of seven major steel mills and five service centers in seven European countries, after which it became one of the top 10 steel producers. in the world outside of China.
Gupta’s plan at the time, he said, was to make “green steel” in India from scrap steel he could get by breaking up old ships at the shipyard, then sending it into the steelmaking value chain in Adhunik and making cars. components at Amtek.
In response to questions about the credibility of his deals and funding lines at the time, Gupta said, “In my opinion, (we should be) welcomed with open arms rather than questions. We don’t take anyone’s money but use our own money. Where are you from, where is the money coming from, why are there these questions?”
A Liberty House spokesperson did not respond to email inquiries about this report.
“I think Liberty House has struggled to raise the necessary funds to meet its resolution commitments,” said an investment banker, who advises several resolution candidates. who are comfortable lending to, say, JSW Steel (for Monnet Ispat) or Tata Steel (for Bhushan Steel). They are less comfortable lending to a foreigner like Liberty House, whose foreign credit lines may not be accessible for India.
“What a resolution plan can deliver also depends on industry cycles,” the investment banker said. “With the massive downturn in the automotive sector in India, auto component makers have been hit hard. It is a bad time to invest in the business and it is easier to let the resolution plan expire. Liberty House was perhaps – be passionate about the steel industry, but will now be much less interested in non-essential assets, such as the shipyard and Amtek Auto.
Although IBC took off with great fanfare, three years later it is struggling to close many of the “dirty dozen” of original uncollectible assets, even as bankruptcy courts are weighed down by the burden of a too many cases filed. . And now there are cases like these, which fail at the last mile,” the investment banker said. “The story of this exercise is that IBC is not the preferred option for banks if they want to resolve bad debts. They want to stay out of the legal system and accept ad hoc settlements instead, either from existing developers or new buyers.”
